AI-driven search disrupts education marketing: Sector staring at 50–60% rise in ad costs?

The integration of AI into search results, especially through Google’s Gemini has disrupted the digital marketing playbook for educational institutions. Consider a simple query like “Best MBA colleges in Maharashtra” or “fees in Amity University Noida”: answers now appear instantly within AI overviews, leaving little incentive for users to click on links. This shift has drastically reduced organic traffic, while pushing institutes deeper into paid ad dependence.

As exchange4media earlier reported, the cost of visibility online has soared, with Google’s cost per lead (CPL) for educational institutions rising by 30% to 100% in recent years. In turn, overall digital marketing spends have swelled, forcing institutions to recalibrate their strategies to stay discoverable and relevant.

For example, S.P. Jain Institute of Management and Research (SPJIMR) has recorded a near-50% jump in CPL, coupled with a 15–20% decline in organic click-through rates (CTR). Likewise, Manipal Academy of Higher Education has seen a 15–20% spike in CPL for major campaigns.

The pressure has only intensified with the ongoing admission cycle for medical, postgraduate, and late-round university courses, alongside the upcoming wave of MBA and other professional program registrations stretching through December and January. This year’s admission cycle has already seen CPCs and CPLs climb 20–25%, but experts warn that over the longer term, the combination of Gemini’s AI features and recurring seasonal surges could push education ad costs up by 50–60%.

“The PG admission season has brought about a notable spike in Google's ad rates, with CPCs and CPLs increasing by a substantial 20-25% compared to earlier this year,” said Sanket Savaliya, Senior Brand Manager at MGID. He noted that Gemini’s AI Overview has heightened competition for ad visibility, pushing institutions to pay a premium for top slots. The surge in demand has turned search into a seller’s market, driving ad rates even higher and making the landscape tougher for advertisers.

Colleges and universities are feeling the impact of rising digital marketing costs.

Dr. Indu Sharma, Assistant Professor, Alliance School of Business, said, “Gemini’s AI Overview will impact the demand and pricing of advertisement spend by educational institutions more compared to the last year due to the advance feature of personal assistance, Gemini’s AI Overview. The average cost will increase by 50% and seasonal demand will impact the costing attributes.” She further observed that seasonality and peak admission demand make relevance harder to maintain, with costs driven by features, attributes, and bidding dynamics. This model has pushed education-sector ad costs up by 50–60%, as information searches are highly time-bound.

Prof. Rohit V. Kumar, Associate Professor of Marketing, Strategy, and General Management at IMI Bhubaneswar, said, “Although confirmed figures are not available, I believe CPCs have increased by more than ₹100 in the education sector, with CPLs well above ₹500. As the admission season progresses, both CPC and CPL are likely to rise further.”

Sharma explained that with global demand for PG courses and fixed campaign budgets, marketers must approach strategy with objectivity. Google, which derives about 60% of its revenue from ads, saw CPCs peak at around ₹500 plus tax in 2024, compared to ₹200–300 in normal periods. The education sector averages a 4% CTR, with CPLs ranging from ₹5,000 to ₹8,500. While PG admission searches dip slightly in September, volumes rise again within months, making keyword relevance, timing, and campaign optimization critical in the AI-driven search era.

Ramessh Misshra, Deputy Director of Central Programme Marketing at S.P. Jain Institute of Management and Research (SPJIMR), added that the AI Overview feature has affected campaign visibility during peak admission months, making lead generation more competitive and costly. 

Misshra said, “The hikes aren’t drastically steep but sharper than usual, especially for high-intent keywords. Looking ahead, overall search volumes on Google might even decline as platforms like ChatGPT, Perplexity, and Meta AI deliver faster, more precise answers, reducing reliance on traditional search. This makes it critical for marketers to rethink strategies beyond Google alone.”

Meanwhile, IMI Bhubaneswar, whose media is managed by shared services providers, did not provide quantitative data. However, Kumar noted that intensified bidding in the post-AI era is straining budgets. Funds that were adequate before may now fall short, increasing lead-generation costs and limiting reach. Smaller budgets or reliance on organic leads could reduce search visibility, potentially impacting student quality, teaching standards, and placements.

According to Saloni Shrivastava, Head of AI Curriculum Deployment and Marketing at Ethara AI, Google’s CPCs and CPLs during this year’s PG admission season are noticeably higher than earlier. “For campaigns, this has created a more competitive environment—especially in peak admission months—where the cost of securing meaningful visibility has gone up. Lead generation is still possible, but it requires sharper messaging that stands out even when the initial touchpoint is an AI summary,” she added. 

Burzeen Bhathena, Director, Marketing at NMIMS stated that while Gemini can surface quick answers, it cannot replace the deeper research prospective students seek—on programs, curriculum, placements, or campus life. For such mid-and bottom-funnel queries, students still click through to university sites. What has changed is the heightened competition for leads, with more advertisers relying on paid search, driving up costs. Budgets are under pressure, but smart targeting and optimized landing pages can help contain them.

Budget reallocation

Budget reallocation has become a key strategy for educational institutions navigating rising digital marketing costs. Educational institutions are increasingly reallocating budgets across channels (e.g., Meta, YouTube, influencer collaborations) to balance ROI. 

“At SPJIMR, we are reallocating spends toward Meta, YouTube, and education portals to balance ROI. Meta continues to deliver strong engagement, while YouTube enables impactful storytelling. However, a significant portion of our budget still goes into Google Ads, given its scale and reach,” Misshra highlighted, and said that a multi-channel approach reduces reliance on a single platform, mitigates rising CPLs, and ensures broader student reach, making campaigns more cost-efficient and effective.

Bhathena reiterated this thought and said, “We are actively rebalancing our mix to protect ROI. Even though Search Engine Marketing continues to remain indispensable for high intent leads and quality conversions, it can no longer carry the full weight of lead generation by itself. However, we are investing more on alternative channels where our audiences are present including YouTube and social media platforms like Instagram to build awareness.”

He explained that education portals and affiliate tie-ups remain key for delivering high-intent traffic while reducing reliance on Google. Institutions are also strengthening owned media assets, landing pages, social handles, and YouTube alongside influencer-led storytelling and student-driven content. The focus is less on cutting search spends and more on ensuring every channel is optimized and accountable within the admissions funnel.

Advertisement platforms are also reallocating spends across channels for their clients. Savaliya highlighted that rising costs have prompted a shift toward alternative channels, with a larger portion of budgets going to Meta and YouTube for targeted reach, while influencer collaborations are being explored as a more cost-effective way to engage audiences.

Digital ad spends to rise every admission cycle

Experts further noted that digital ad spends for educational institutions will continue to climb with each admission cycle. Rising competition for visibility, amplified by AI-driven search features like Google’s Gemini, coupled with seasonal demand, will push up CPCs and CPLs year after year.

“I expect we’ll see rising spends for at least the next few admission cycles, particularly as AI features become standard in search results and advertisers adapt to them,” said Shrivastava. She noted that expanding into AI-native search, webinars, and programmatic content could ease competition for Google’s prime ad space and help stabilize costs, but this requires early adoption and experimentation, which not all institutes are prepared for.

Bhathena added that digital spends will continue to rise with each admission cycle simply because organic search traffic is declining and more institutions are relying on paid media to protect their funnels. “With the advent of foreign universities on India soil the competition is only going to get hotter and the existing players are going to feel the heat sooner rather than later.”

On the other hand, Kumar noted, the market may stabilize over time. 

Kumar suggested that, over time, the market is likely to stabilize due to several strategic shifts. Institutions are diversifying their funnels, leveraging YouTube, Instagram, and influencer partnerships to boost reach efficiently. Many are increasing focus on Meta advertising and content marketing, while investing more in owned and earned media such as websites, blogs, newsletters, and student-generated videos. Additionally, new and niche platforms, such as LinkedIn, WhatsApp, SMS, Reddit, and Quora are being explored for better ROI and audience engagement.

“The next two admission cycles will be about experimentation and optimisation of new channels, strengthening conversion journeys, and ensuring that digital spends deliver sustainable outcomes rather than short-term volume,” Bhathena concluded.